Oil
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Weaker USD provides support for oil prices
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United States say that Iran's latest response to EU proposal is a step backwards in nuclear deal talks
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Morgan Stanley lowered Q4 2022 Brent price forecast from $110 to $95 per barrel. Forecast of $100 per barrel for 2023
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Morgan Stanley also expects Russian oil flows to drop considerably next year as embargoes take effect
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Russia has almost doubled oil exports to "friendly" countries but it will be unable to fully offset lack of exports to EU
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Japan boosted fuel imports significantly due to high LNG prices, suggesting that gas-to-oil switch may be just beginning
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Japanese oil imports hit a 4-year high in August
Russian maritime oil exports to "friendly" countries almost doubled but increasing it further may be a hard task. Source: Bloomberg, Kpler
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Create account Try a demo Download mobile app Download mobile appJapanese import of oil and oil derivatives is on the rise. Source: Bloomberg, Vortexa
Natural Gas
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European natural gas prices remain under pressure in spite of uncertainty over energy supplies
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Gazprom does not plan to resume gas flows via Nord Stream or boost flows via other pipelines
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European gas stockpiles are almost 84% full. Deliveries to Europe are relatively large, even given lack of supply from Russia. Meanwhile, consumption remains relatively small
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According to Guardian, EU will not agree on price caps on natural gas in order for LNG exporters to remain competitive
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According to Bloomberg report, EU will agree on a €180-200/MWh price cap on energy prices, which will be financed with a 33% windfall tax
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Energy consumption in the EU will be reduced by 10%
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Heating season begins by the end of October
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Natural gas prices in the United States rebound despite recent big inventory builds
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Freeport LNG terminal is expected to resume operations in mid-November
European gas inventories continue to fill up and are almost 84% full already. It should be noted that inventories will last for around 2 months in case of complete halt to supplies. Source: Bloomberg
Sugar
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Sugar production outlook in Brazil, Europe and India deteriorated
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Sugarcane harvest in Brazil was poor and ships had to wait in long queues in Brazilian ports for sugar to be loaded
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Drought in Europe caused outlook for sugar beet harvest to deteriorate
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Outlook for Indian sugar exports was lowered. Traders speculate that exports outlook could improve once prices jump above 19 cents per pound
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Futures spreads show that market is concerned about availability of sugar in near-term
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Sugar prices are also support but recent rebound in oil and corn prices
Spread between October and March sugar futures widened to a record level, pointing to a stretched physical market. Source: Bloomberg
SUGAR rebounds from a key support near 23.6% retracement of the latest major upward impulse. Seasonal patterns, higher oil and corn prices support the scenario of price rebound towards the upper limit of the ongoing trading range. Source: xStation5
Silver
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Strong rebound in silver prices is a result of weaker USD and hopes that inflation peak was reached already
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Situation on the bond market does not justify rebound on the precious metals market. However, yields may be more reflective of the outlook on interest rates over a 1-year horizon
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Speculative positioning isn't looking too bullish - large increase in number of short positions and a moderate increase in number of long positions. However, it also shows that interest in precious metals is increasing
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ETFs continue to sell silver holdings
Net speculative positioning on silver dropped to an almost extremely low level. Source: Bloomberg
Silver prices are supported by a weaker US dollar. Rebound on the silver market is much stronger than on the gold market, hinting that the silver rally may have gone ahead of itself. Source: xStation5